As every Colorado businessperson knows, a contract dispute can be time consuming and costly. While the best way to avoid contract disputes is to have a well-drafted contract, sometimes even the best contract is vulnerable to dispute. When this happens, the best weapon may be a skilled and experienced business attorney and a choice to use a dispute resolution process like arbitration. Colorado readers may find the following contract dispute among two world famous businesses interesting.
It was recently reported that a contract dispute between well-known companies Tiffany & Co. and Swatch Group has come to an end. In a statement issued by the companies, it was made public that Tiffany & Co. was ordered to pay Swatch around $449 million in compensation. The order also required Tiffany to pay Swatch more than $9 million in legal fees and arbitration costs. Tiffany expressed frustration and disappointment with the order.
The contract dispute between the New York-based jewelry company and the Swiss watchmaker developed sometime in 2011. The companies apparently agreed to a joint venture to make and sell watches together in 2007 under the name Tiffany Watch Co. Ltd. In 2011, however, Swatch argued Tiffany breached the contract by trying to delay the deal. In response to the alleged breach of contract, Swatch ended the deal.
In many situations where companies enter into contract to exchange goods or services - or even, as in this situation, work as a joint venture - they may also agree that if something happens, any contract dispute will be resolved through the arbitration process. Arbitration has its advantages over court-based litigation, as it can often move quicker than courts and cost less. Parties also get to agree on the rules governing the arbitration as well as the venue, or location. However, as with any legal decision, it can be important to weigh a number of consequences before choosing arbitration.
While the financial repercussions of the dispute between Swatch and Tiffany are high, sometimes the biggest fallout in a contract dispute is the relationship between two companies, even here in Colorado. Fortunately, with the right attorney it is possible to not only aggressively protect important business interests in a contract dispute or other business dispute, but it may also be possible to preserve valuable business relationships in the process.
Source: The Washington Post, "Arbitrator orders Tiffany to pay Swatch $449 million in contract dispute," Dec. 22, 2013